London Imperial College's Tanaka Business School runs what Dr Simon Barnes, head of its entrepreneurship centre, calls a "dating agency for students and technologies".
MBA business plan competitions give young entrepreneurs greater kudos, credibility and cash, writes Amy McLellan
Self-starters looking to hone their entrepreneurial skills would do well to take a look at an MBA. Business schools are increasingly tailoring their programmes to satisfy growing student appetite to strike out on their own. According to research from the Association of MBAs, 22 per cent of graduates use their MBA skills to start their own business and a further 17 per cent plan to do so in the future.
"Rather than just steaming off into finance and consultancy, MBA graduates are becoming much more entrepreneurial," says Fiona Reid of the Oxford Science Enterprise Centre (OxSEC) based at Saïd Business School. "A lot of them are more interested in setting up their own company and the business plan competition is a perfect practise run."
These competitions are a common feature of many MBA programmes and provide a forum for budding entrepreneurs to pitch their investment case to a panel of venture capitalists, business angels and other start-up friendly investors. There's usually a cash prize for the winners, which may range from a few thousand pounds to equity investments of £50,000 and upwards.
Spotting the real entrepreneurial talent amid a pile of polished presentations can be tricky. However, seasoned judges say they develop a canny ability to sniff out the money-makers. One such veteran is Professor Pedro Nueno of IESE Business School, which has run a business plan competition for over 20 years.
"Some very successful companies have participated in this competition," says Nueno. More than 30 per cent of the Spanish business school's graduates start their own business within 10 years and successful finalists have gone on to launch what have become substantial businesses in a range of sectors. Nueno believes these competitions fill a gap in the market . "It is becoming harder to access seed capital. This is why business plan competitions can be so valuable."
However, the rewards can be more than just monetary. Howard S Young wrote the winning business plan in the 2004 competition run by the Tuck School of Business in New Hampshire, securing $4,000 (£2,200) in prize money before going on to win a further $170,000 (£94,400) in a state-wide new venture competition.
"The money has been an enormous help," says Young of start-up Woomera Therapeutics - a bio-pharmaceutical firm, which is developing cancer treatments. "But the real benefit is that the competition is a great motivator to really hammer out why you think your business is a compelling idea. Too many entrepreneurs get so immersed in their idea they have a hard time communicating it to people."
Young believes there's another key benefit to success in a high profile competition: "It's a clear mark of credibility."
An essential ingredient for making investors stick with unproven, technology-driven start-ups, which often have protracted life cycles. "A genomics-based invention will create a product in 15 years time - if you are lucky," says Fiona Reid of OxSEC, which helps run Oxford University's business plan competition. "You'll need millions of dollars along the way so you need to build up the value of the idea and your team."
Some of the most successful entrants in the Oxford competition, now in its sixth year with a £20,000 first prize, are those that have combined the innovation of university researchers with the commercial nous of the Saïd Business School students.
For example, 2002 finalist Seamless Display married the business talents of two Saïd MBA students with an engineering researcher's patented imaging technology. The company is now a thriving business in Silicon Valley in the US.
"There's always been this myth about UK plc that we're great at inventing things but not good at commercialising them," says Reid. "Competitions like this help with that knowledge transfer from universities."
Some institutions have sought to fast-track that knowledge transfer by formalising the relationship between research departments and their corresponding business schools.
London Imperial College's Tanaka Business School runs what Dr Simon Barnes, head of its entrepreneurship centre, calls a "dating agency for students and technologies". The MBAs are divided into teams, assigned a piece of technology developed within the college and given four months to draw up a commercial strategy.
And this is not just a theoretical exercise. "Their work informs part of the decision taken by Imperial on how to launch the technology as a business venture," says Barnes. "We hope a proportion will then write a full business plan, enter competitions and take it forward."
Tanaka also runs an Entrepreneurs' Challenge with sponsorship of £55,000 per year. Barnes believes there is no better training for MBA students. "A big part of being an entrepreneur is raising capital and I cannot think of another way of teaching that than through these business plan competitions," he says.
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